OF  THE 


gJIranj!  anlr  Susquehanna  §L  €«. 


TO  THE 


STOCKHOLDERS  AND  MEMORIALISTS. 


ALBANY: 

J.  MUNSELL,  78  STATE  STREET. 
1854. 


D’02 


THE 


DIRECTORS 

OF  THE 

JPrang  an^itsi)ucjM!ia§t|L  Ci i. 


TO  THE 


STOCKHOLDERS  AND  MEMORIALISTS. 


ALBANY: 

J.  MUNSELL,  78  STATE  STREET. 
1854. 


Digitized  by  the  Internet  Archive 
in  2017  with  funding  from 

University  of  Illinois  Urbana-Champaign  Alternates 


https://archive.org/details/directorstostockOOalba 


I 


TO  THE 

STOCKHOLDERS 

OF  THE 

^Jfoatrg  Httb  Jjusqucjrarora  |\oab  Ccmpng. 


The  President  and  Directors  to  whose  care  you  have  confided 
the  great  work  you  have  undertaken,  deem  it  their  duty  to 
submit  to  you  the  following  statement  of  its  present  condi- 
tion. It  is  known  to  all  of  you  that  after  repeated  efforts 
to  let  the  work,  a contract  was  finally  made  on  the  30th 
day  of  May,  1853,  with  Gouverneur  Morris,  George  L. 
Schuyler,  Sidney  G.  Miller,  Josiah  W.  Baker,  James  S.  T. 
Stranahan  and  Charles  G.  Case,  for  the  complete  construc- 
tion and  equipment  of  the  road.  The  nominal  sum  that 
was  to  be  paid  them,  was  considerably  more  than  it  had 
been  at  first  supposed  the  road  would  cost,  but  not  more  than 
was  justified  by  the  great  advance  that  had  taken  place  in 
the  price  of  iron,  provisions  and  labor.  Could  we  have 
paid  cash  entirely,  we  do  not  doubt  that  a more  favorable 
contract  could  have  fcbeen  made,  but  that  was  manifestly 
impossible,  and  we  therefore,  after  consulting  with  very 
many  of  the  stockholders,  closed  the  contract  upon  the  best 
terms  we  could  obtain.  From  every  quarter  we  were  urged 
by  the  subscribers  to  do  so,  and  on  every  hand  we  received 
the  strongest  assurances  of  their  approbation  after  it  was 
done.  All  then  appreciated  the  great  advantage  of  securing 
contractors  of  undoubted  experience  and  responsibility,  and 
the  fact  that  we  had  thus  rendered  the  completion  of  the 
work  certain  without  undertaking  anything  not  entirely  in 
the  power  of  the  Company  to  perform,  was  regarded  by  every 


15  2.512.4 


4 


stockholder  as  the  strongest  evidence  of  the  wisdom  of  the 
contract.  All  knew  that  the  expenses  of  construction,  loss 
of  interest,  depreciation  of  bonds,  commissions  for  their 
negotiation,  and  the  other  numerous  contingencies  attending 
the  completion  of  so  great  an  enterprise,  always  amounted 
to  much  more  than  any  one  anticipated  in  the  outset,  and 
the  prudent  and  sagacious  regarded  it  as  by  no  means  the 
least  advantage  that  we  had  secured,  that  a sum  certain 
was  fixed  for  which  the  whole  was  to  be  completed,  and 
that  the  hazard  of  all  these  contingencies,  and  the  risk 
arising  from  possible  changes  in  the  money  market,  had  all 
been  transferred  to  contractors,  whose  ability  to  protect  us 
against  them  was  undoubted.  The  correctness  of  those 
opinions  have  since  been  fully  justified.  The  contractors 
have  proceeded  slowly  with  the  work  for  about  one  year. 
During  that  lime  everything  that  enters  into  its  cost  has 
steadily  advanced  in  price.  The  money  market  has  been 
so  seriously  affected  that  all  enterprises  of  the  kind  in  weak 
hands  have  been  suspended  or  abandoned,  and  the  negotiation 
of  rail  road  securities  at  any  but  the  most  ruinous  rates 
has  become,  for  the  present,  entirely  hopeless.  We  deeply 
regret  this  change,  yet  we  are  certain  that  you  will  find  in 
it  the  most  ample  justification  of  the  course  we  have  pur- 
sued. Had  we  undertaken  to  negotiate  our  own  bonds,  we 
might  have  failed  in  the  attempt.  Had  we  contracted 
with  weak  or  irresponsible  parties,  they  must  have  been 
ruined,  and  all  hope  of  building  the  road  at  least  for  the 
present,  would  have  been  lost.  Instead  of  being  exposed 
to  either  of  these  contingencies,  we  have  contractors  of 
high  character,  ample  resources  and  great  experience — 
able  to  hold  the  securities  they  receive  until  the  better 
times  we  now  believe  not  far  off,  shall  enable  them  to 
dispose  of  them  to  advantage — and  ready  and  willing,  we 
doubt  not,  to  fulfill  to  the  end,  the  contract  they  have  made. 
We  have  undertaken  to  pay  them  no  more  money  than  you 
have  pledged  yourselves  to  furnish  us;  and  if  you — each  of 
you — will  promptly  do  your  part,  it  will  be  but  a short 


5 


time  before  this  object  of  your  hopes  will  be  fully  realized, 
and  well-filled  and  heavily-loaded  trains  be  running  through 
the  Valley  of  the  Susquehannah.  Under  such  circumstances 
we  can  look  backward  with  much  satisfaction  to  what  has 
been  done,  and  forward  with  the  highest  hopes  to  the  speedy 
and  certain  realization  of  your  and  our  most  earnest  wishes. 

It  is  not  to  be  supposed  that  all  this  has  been  done 
without  encountering  the  difficulties  that  usually  attend 
enterprises  of  such  magnitude  and  importance.  Misrepre- 
sentation and  calumny  we  expected,  and  we  have  been  in 
no  degree  disappointed.  We  have  relied  upon  your  good 
sense  to  correct  the  one  and  brand  the  other.  Timid  souls 
have  fainted  by  the  way.  We  regret  their  weakness. 
Dishonest  ones  have  tried  to  avoid  the  fulfillment  of  sacred 
engagements,  upon  the  faith  of  which  we  had  acted  in 
contracting  the  work.  The  laws  have  furnished  us  the 
means  to  at  once  defeat  and  punish  their  dishonesty.  Rival 
interests  have  exerted  themselves  to  stay  our  progress,  and 
they  have  found  among  our  subscribers  a few  that  were 
willing  to  be  their  tools,  even  for  such  a purpose.  These 
are  the  common  incidents  of  rail  road  construction,  and 
neither  you  nor  we  should  be  disheartened  or  discouraged 
by  them.  So  long  as  the  great  body  of  the  stockholders 
are  firm  and  faithful,  we  shall  not  be  weakened  by  the  loss 
of  those  who  were  with  us,  but  not  of  us.  Most  of  the 
obstacles  thus  encountered,  have  been  too  trivial  to  meri  t 
particular  notice.  There  are  two  exceptions  that  we  desire 
to  place  fairly  before  you.  The  first  was  the  refusal  of  a 
number  of  our  subscribers  in  Morris  and  Laurens  to  pay 
their  subscriptions.  And  the  other,  the  presentation  to  your 
Directors  of  a memorial  from  several  subscribers  in  Albany 
asking  them  to  discontinue  the  work  and  abandon  the 
contract. 

We  need  not  advert  to  the  origin  and  early  history  of  the 
attempted  repudiation  by  a few  in  Morris  and  Laurens.  It 
has  had  an  importance  given  to  it  by  exaggerated  rumors 
that  it  never  deserved  and  has  now  been  put  effectually  at 


6 


rest  by  the  decision  of  our  courts.  It  has  furnished  an 
opportunity  to  have  every  movement  from  the  organization 
to  the  present  day  fully  examined,  and  we  can  not  doubt  has 
satisfied  the  intelligent  men  that  to  our  surprise  and  regret 
'were  engaged  in  it,  that  ihey  were  misled  by  exaggerated 
or  false  reports,  and  that  in  the  course  pursued  they  have 
been  most  unjust  to  the  company  and  themselves.  We 
hope  and  believe  that  they  will  henceforth  be  found  on  the 
side  of  law  and  order,  and  that  all  that  has  been  unpleasant 
in  the  matter  will  soon  be  entirely  forgotten.  They  owe  it  to 
themselves  thus  to  show  that  their  opposition  has  not  arisen 
from  a desire  to  shirk  out  of  an  honorable  obligation,  and 
we  believe  that  they  will  not  fail  to  do  so.  The  report  of 
Judge  Willard,  the  distinguished  jurist  to  whom  the  Morris 
and  Laurens  litigations  were  referred,  is  annexed  hereto, 
and  we  refer  to  it  for  our  complete  vindication,  with  the 
highest  satisfaction. 

The  Albany  memorial  has  also  had  a consequence  attached 
to  it,  that  it  did  not  merit.  Coming  from  less  than  one 
fiftieth  part  in  number,  and  less  than  five  per  cent  in 
amount  of  the  stockholders  of  the  Company,  and  showing 
by  its  statements  that  they  were  greatly  in  error  as  to  the 
supposed  facts  upon  which  they  were  acting,  it  has  left  us 
in  no  doubt  as  to  the  reply  we  should  make  to  the  request 
that  we  would  abandon  the  contract  and  suspend  the  work 
Being  desirous  that  every  stockholder  should  understand 
the  reasons  for  our  decision,  we  have  delayed  a formal  an- 
swer to  the  memorial  until  now. 

Why  should  we  abandon  the  work  ? We  made  the 
contract  in  good  faith,  and  if  each  subscriber  will  do  his 
part,  we  can  fulfill  every  stipulation  it  contains.  The 
memorial  admits  the  value  of  the  road  to  Albany,  and 
every  stockholder  upon  the  line  feels  its  now  absolute 
necessity  so  keenly,  that  he  can  hardly  submit  with  patience 
to  the  necessary  delay  that  attends  its  construction.  The 
general  agricultural  and  business  prosperity  renders  it  easy 
for  our  subscribers  to  pay  as  fast  as  the  road  progresses, 


7 


and  the  small  amounts  in  which  the  stock  is  generally  taken, 
will  enable  us  to  accelerate  the  work  without  making  the 
calls  burdensome  to  any.  Responsible  subscribers  have 
promised  us  all  that  we  have  undertaken  to  pay,  and 
responsible  contractors  have  agreed  therefor  to  do  all  that 
we  desire  to  have  done.  The  suspension  of  many  rail  road 
projects  is  gradually  relieving  the  labor  and  money  markets, 
and  thus  the  contractors  are  to  be  proportionally  benefited. 
We  must  go  to  the  memorial  itself  for  reasons  for  the  sus- 
pension of  the  work,  for  elsewhere  they  are  not  to  be  found. 
The  first  allegation  is,  that  the  road  will  cost  more  than 
was  at  first  expected — that  opinions  were  at  an  early  day 
expressed  by  some  of  the  Directors  that  it  could  be  built 
for  half  the  present  contract  price,  and  assurances  given 
that  it  would  pay  ten  per  cent  per  annum.  But  can  this 
objection  now  be  urged  with  any  degree  of  propriety  ? 
One  year  has  now  elapsed  since  the  contract  was  made,  and 
both  parties  have  in  good  faith  been  carrying  it  out.  Had 
it  been  intended  to  raise  it,  the  commonest  principle  of 
justice  would  have  required  that  it  should  be  done  at  once, 
and  not  after  twelve  months’  acquiescence  in  the  terms  of 
the  contract.  Did  those  who  now  put  it  forward  ever 
suppose,  themselves , that  the  road  would  not  cost  about  as 
much  as  the  average  of  first  class  roads  ? Are  they  not 
well  aware  that  the  Albany  and  Schenectady,  Hudson 
River,  Western  Massachusetts,  New  York  and  Erie,  and 
other  similar  roads  have  all  cost  more  per  mile  than  the 
exaggerated  estimate  of  the  memorial  now  makes  the  cost 
of  ours  ? If  they  supposed  it  would  pay  ten  per  cent,  they 
must  now  admit  that  it  will  pay  five  per  cent;  and  even  at 
that  rate,  what  one  of  the  stockholders  would  wish  to  incur 
the  great  loss  that  must  follow  a suspension  of  the  work, 
and  at  the  same  time  give  up  the  great  public  and  private 
benefits  amounting  to  much  more  than  the  other  five  per 
cent,  that  will  unavoidably  follow  its  construction  ? The 
completion  of  the  work  being  now  secure,  it  will  at  this 
day  require  some  other  reason  to  justify  its  suspension. 


8 

But  the  memorialists  expected  that  “ the  board  would 
‘ abstain  from  putting  the  road  under  contract  until  such 
“ an  amount  of  subscriptions  had  been  obtained  as  should 
“ ensure  its  completion  upon  the  most  favorable  terms,  pro- 
“ tect  them  against  depreciation  of  bonds,  enormous  allow - 
“ ances  to  contractors,  and  the  dangerous  provisions  of  the 
“ General  Rail  Road  Act  of  1850,  sections  10  and  12, 
“ throwing  upon  stockholders  unlimited  personal  liability 
for  certain  acts  of  Directors.”  The  inference  from  this 
statement  is  unavoidable,  that  they  intend  to  charge  the  Di- 
rectors with  having  in  each  of  these  particulars  disappointed 
their  just  expectations. 

We  have  already  shown  you  that  we  have  contracted  the 
road  upon  terms  that  “ ensure  its  completion,”  and  we 
hazard  nothing  in  adding,  that  the  terms  “ are  greatly  more 
favorable”  than  any  that  could  now  be  obtained.  The 
“ depreciation  of  bonds”  ^ all  borne  by  the  contiactors , and 
the  “ enormous  allowances”  thus  insinuated  to  have 
been  made  to  them,  must  vanish  before  the  statements  sub- 
sequently made  in  the  memorial,  that  the  contractors  are 
ready  to  abandon  and  cancel  the  contract.  If  it  is  so 
advantageous  to  them  and  so  disastrous  to  the  company, 
and  if  we  have  neglected  to  protect  the  memorialists  against 
the  dangerous  personal  liability  referred  to,  is  it  to  be 
believed  that  shrewd  and  experienced  contractors,  would  be 
willing  to  abandon  itfe  “enormous  allowances”  and  all, 
except  upon  the  condition  that  they  should  be  paid  liberally 
for  the  losses  and  damages  they  would  sustain?  Is  not  the 
alleged  fact  of  their  willingness  to  give  it  up,  a perfect 
answer  to  every  charge  of  extravagance  or  improvidence  in 
making  it?  We  have  supposed  that  contracts  made  secure 
by  “ unlimited  personal  liability”  and  that  involved 
“ enormous  allowances  and  “ gigantic  expenditures,”  were 
not  of  the  class  that  contractors  would  announce  their 
readiness  to  abandon,  before  any  formal  application  for  that 
purpose  had  been  made  to  them. 

But  is  it  true  that  we  have  neglected  to  protect  you 


9 


against  personal  liability?  By  having  contractors  of 
undoubted  wealth,  we  secured  you  against  responsibility 
to  their  employees.  By  undertaking  to  pay  only  such  sum 
as  you  had  promised  us,  we  restricted  your  liability  to  such 
an  amount  as  you  had  yourselves  voluntarily  assumed. 
But  there  is  another  feature  in  the  use  that  is  sought  to  be 
made  of  this  dreaded  personal  liability  that  we  must  not 
overlook.  At  the  time  they  placed  their  names  to  the 
memorial,  several  of  the  signers  well  knew  that  the  legis- 
lature of  the  state  then  in  session  in  their  own  city,  had  so 
amended  the  general  rail  road  law,  as  to  do  away 
entirely  the  danger  they  pretended  to  fear!  Why  was  it 
thus  used  to  create  unfounded  apprehensions  in  the  minds 
of  those  that  were  ignorant  of  the  change?  Could  it  have 
been  for  any  fair  or  honorable  purpose? 

In  various  forms  and  modified  language,  the  same  charges 
are  repeated  again  and  again  in  the  memorial:  The  high 
price — the  loss  of  the  stock — the  hard  times — the  depre- 
ciation of  bonds,  and  the  personal  liability , these  form  the 
basis  upon  which  their  request,  that  we  shall  abandon  the 
work,  is  founded.  We  have  already  shown  you  how 
entirely  we  are  protected  against  these  alleged  difficulties 
by  the  contract  we  have  made,  and  how  wholly  inappli- 
cable they  are  to  the  present  condition  of  the  company. 
Had  the  contractors  desired  to  present  their  grounds  of 
dissatisfaction  with  the  contract,  they  could  hardly  have 
employed  other  terms  than  those  used  by  the  memorialists. 
Surely  they  can  not  be  applicable  to  both  sides  of  the  same 
contract ! 

But  we  are  authorized  to  say,  that  the  memorial  was  not 
read  by  but  a small  proportion  of  those  who  signed  it,  and 
that  it  does  not  express  the  wishes  or  opinions  of  many 
whose  names  are  appended  to  it.  Some  were  told  that  the 
directors  would  undoubtedly  be  glad  of  such  an  excuse  to 
abandon  the  work.  Others,  that  the  road  was  hopelessly 
involved,  and  the  sooner  it  was  stopped  the  better.  Some 
have  said  to  us  that  they  would  not  have  put  their  names 
2 


10 


to  the  paper  but  for  those  statements,  and  that  if  we  can 
go  on  with  the  work,  they  would  much  rather  lose  all  they 
have  subscribed , then  not  have  the  road  built . The  memo- 
rial itself  admits  that  “ the  road  will  be  of  great  value  in 
many  points  of  view ; that  it  will  open  a considerable 
extent  of  country  to  our  market,  and  command  a respect- 
able local  traffic;  that  it  is  highly  desirable  to  stockholders 
living  on  the  line , and  that  it  had  its  origin  in  “ a desire  to 
build  up  and  benefit  the  trade  of  Albany ! ” In  such  a connec- 
tion, we  are  thankful  for  even  these  admissions.  A road 
that  is  of  so  great  value  in  many  points  of  view:  that  “ will 
open  a considerable  extent  of  country  to  the  Albany 
market;”  that,  “ will  command  a respectable  local  traffic;” 
that,  “is  highly  desirable  to  stockholders  on  the  line;” 
that  originated  in  the  noblest  of  motives,  that  will  give 
Albany  two  grand  central  roads,  and  connect  it  as  directly 
with  the  southern  line  of  counties,  northern  Pennsylvania, 
the  coal  fields,  the  iron  beds,  the  timber  regions,  and  the 
great  basins  of  the  Ohio  and  Mississippi,  as  it  is  now  wuth 
Buffalo,  is  not  one  to  be  abandoned,  without  the  weightiest 
of  reasons,  and  a necessity  so  irresistible,  that  human  skill, 
energy  and  perseverance  are  inadequate  to  overcome  it. 
No  such  reasons — no  such  necessity  now  exists! 

But  there  is  another  consideration  that  is  in  our  judg- 
ments perfectly  conclusive.  If  we  go  on,  we  shall  have 
the  road , if  we  stop  it  now,  it  will  be  many  years  before  any 
one  can  be  found,  bold  enough  again  to  undertake  it.  After 
the  most  careful  examination,  we  are  fully  satisfied  that  to 
suspend  the  work  where  it  now  is,  would  cost  the  stock- 
holders nearly  if  not  quite  the  full  amount  of  their  subscrip- 
tions. The  damages  to  be  paid  and  the  litigation  in  which 
we  would  necessarily  be  involved,  would  render  it  the 
labor  of  years  to  wind  it  up.  In  every  view,  whether  it  be 
of  difficulty,  responsibility,  or  expense,  we  believe  it  safer 
and  better  to  fulfill  our  contract. 

In  justice  to  Albany  itself  we  must  go  on.  As  the  cap- 
ital of  the  state,  it  is  supported  and  sustained  by  the  state 


11 


feeling  and  state  pride  of  all  our  citizens.  The  southern 
and  western  counties  feel  most  deeply  the  inconvenience 
that  now  attend  their  communication  with  it;  the  southern 
counties  particularly  have  looked  to  our  road  as  obviating 
this  difficulty.  And  shall  it  be  understood  that  a few  capi- 
talists at  Albany  have  disappointed  their  hopes,  and  re- 
fused the  advantages  brought  to  their  door  1 

This  then  is  our  answer  to  the  Albany  memorial.  We 
can  not  abandon  the  contract  and  suspend  the  work.  Every 
dictate  of  policy,  prudence  or  honor  forbid  it.  The  reasons 
urged  are  in  themselves  insufficient — the  alleged  fears  are 
groundless — the  supposed  facts  do  not  exist.  No  such 
change  has  occurred  since  the  contract  was  made,  as  would 
enable  us  to  abandon  it  without  being  justly  chargeable 
with  a vacillation  and  weakness  that  would  prove  us 
unfit  for  the  place  we  occupy.  No  such  proportion  of 
the  stockholders  have  united  in  the  memorial  as  to  justify 
us  in  the  belief  that  it  is  the  desire  of  more  than  a very 
small  minority,  that  the  work  should  be  abandoned.  We 
can  not  turn  back  without  the  most  flagrant  desertion  of 
those  that  from  the  commencement  have  been  the  warmest 
friends  of  the  work,  that  have  never  faltered  while  others 
have  been  faithless,  that  through  evil  report  and  good  re- 
port have  alike  upheld  our  hands,  and  cheered  and  en- 
couraged us  on  our  way.  We  can  not  turn  back  without 
greater  loss,  all  things  being  considered,  than  we  shall 
sustain  by  going  forward,  or  without  inflicting  a calamity 
upon  Albany  and  the  country  along  the  line,  from  which 
neither  would  recover  for  years.  We  can  not  stop  without 
losing  the  road , and  that  is  a loss  to  which,  while  we  are 
sustained  as  we  now  are,  by  nine-tenths  of  the  true  and 
faithful  stockholders,  we  will  never  submit . We  have  lost 
no  portion  of  our  faith  in  the  feasibility  of  the  road,  or  its 
value  as  an  investment,  but  on  the  contrary  as  we  have 
become  better  acquainted  with  the  country  through  which 
it  is  to  pass,  that  faith  has  been  greatly  increased. 

We  have  thus  submitted  to  the  stockholders  a frank  and 


12 


full  statement  of  the  present  condition  of  this  great  work. 
We  expect  within  the  next  month  that  the  force  upon  the 
line  will  be  greatly  increased,  and  lhat  it  will  henceforth 
be  prosecuted  much  more  rapidly  than  it  has  been  hitherto. 
But  it  must  not  be  forgotlen,  that  the  stockholders  have 
also  their  duty  to  perform.  We  have  made  the  contract 
upon  the  faith  they  have  pledged  us,  that  they  would  pay 
their  subscriptions  promptly.  Let  them  encourage  us  by 
showing  their  interest  in,  and  their  anxiety  for  the  com- 
pletion of  the  road,  by  disregarding  every  foolish  slander 
or  false  report,  and  by  a confidence  as  full  and  frank  as 
that  we  have  now  placed  in  them,  and  they  shall  see  the 
consummation  of  their  hopes  in  the  completion  of  the 
Road,  in  less  time  than  has  now  elapsed  since  their  organi- 
zation was  perfected. 

Albany,  May  23d,  1854. 

E.  P.  PRENTICE, 
EDWARD  TOMPKINS, 
ANDREW  WHITE, 

Com . of  the  Board. 


